Category: Tax Administration Act No. 28 of 2011

Section 181 (TAA) – Liability of shareholders for tax debts

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181.    Liability of shareholders for tax debts

 

(1)     This section applies where a company is wound up other than by means of an involuntary liquidation without having satisfied its outstanding tax debt, including its liability as a responsible third party, withholding agent, or a representative taxpayer, employer or vendor.

 

(2)     The persons who are shareholders of the company within one year prior to its winding up are jointly and severally liable to pay the tax debt to the extent that-

 

(a)     they receive assets of the company in their capacity as shareholders within one year prior to its winding-up; and

 

(b)     the tax debt existed at the time of the receipt of the assets or would have existed had the company complied with its obligations under a tax Act.

 

(3)     The liability of the shareholders is secondary to the liability of the company.

 

(4)     Persons who are liable for the tax debt of a company under this section may avail themselves of any rights against SARS as would have been available to the company.

 

(5)     This section does not apply-

 

(a)     in respect of a “listed company” within the meaning of the Income Tax Act; or

 

(b)     in respect of a shareholder of a company referred to in paragraph (a).

Section 169 (TAA) – Debt due to SARS

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169.    Debt due to SARS

 

(1)     An amount of tax due or payable in terms of a tax Act is a tax debt due to SARS for the benefit of the National Revenue Fund.

 

(2)     A tax debt is recoverable by SARS under this Chapter, and is recoverable from-

 

(a)     in the case of a representative taxpayer who is not personally liable under section 155, any assets belonging to the person represented which are in the representative taxpayer’s possession or under his or her management or control; or

 

(b)     in any other case, any assets of the taxpayer.

 

(3)     SARS is regarded as the creditor for the purposes of any recovery proceedings related to a tax debt.

 

(4)     SARS need not recover a tax debt under this Chapter if the amount thereof is less than R100 or any other amount that the Commissioner may determine by public notice, but the amount must be carried forward in the relevant taxpayer account.

Section 182 (TAA) – Liability of transferee for tax debts

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182.    Liability of transferee for tax debts

 

(1)     A person (referred to as a transferee) who receives an asset from a taxpayer who is a connected person in relation to the transferee without consideration or for consideration below the fair market value of the asset is liable for the outstanding tax debt of the taxpayer.

 

(2)     The liability is limited to the lesser of-

 

(a)     the tax debt that existed at the time of the receipt of the asset or would have existed had the transferor complied with the transferor’s obligations under a tax Act; and

 

(b)     the fair market value of the asset at the time of the transfer, reduced by the fair market value of any consideration paid, at the time of payment.

 

(3)     Subsection (1) applies only to an asset received by the transferee within one year before SARS notifies the transferee of liability under this section.

Section 170 (TAA) – Evidence as to assessment

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170.    Evidence as to assessment

The production of a document issued by SARS purporting to be a copy of or an extract from an assessment is conclusive evidence-

(a)     of the making of the assessment; and

(b) except in the case of proceedings on appeal instituted under Chapter 9 against the assessment, that all the particulars of the assessment are correct.

[Paragraph (b) substituted by section 20 of Act 22 of 2018.]

Section 183 (TAA) – Liability of person assisting in dissipation of assets

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183.    Liability of person assisting in dissipation of assets

 

If a person knowingly assists in dissipating a taxpayer’s assets in order to obstruct the collection of a tax debt of the taxpayer, the person is jointly and severally liable with the taxpayer for the tax debt to the extent that the person’s assistance reduces the assets available to pay the taxpayer’s tax debt.